Idaho chooses state-based insurance exchange under "Obamacare"

SALMON, Idaho (Reuters) - Idaho Governor Butch Otter reluctantly opted on Tuesday for a state-based health insurance exchange under terms of President Barack Obama's healthcare overhaul, complaining it would do little to cut costs while inflating government.

Idaho was one of several Republican-led states that delayed compliance with the Affordable Care Act until after the November 6 presidential election in hopes a victory by Republican candidate Mitt Romney would bring a repeal of the law.

Under the law also known as "Obamacare," states had the choice of running their own state-based exchanges, allowing the federal government to administer the program, or form a state-federal partnership to oversee the exchange.

States had faced a November 14 deadline to declare their plans but that was pushed back to December 14 by Health and Human Services Secretary Kathleen Sebelius.

Exchanges are to provide a marketplace for Americans to gain health insurance coverage at government-subsidized rates beginning in 2014.

Idaho was one of six undecided states along with Utah, Indiana, Pennsylvania, Virginia and Florida, according to the Kaiser Family Foundation's website. (Kaiser Family Foundation map: r.reuters.com/wac64t)

Idaho and 18 other states - many of which are controlled by Democrats - have told the administration that they intend to set up their own exchanges, according to the foundation.

Twenty-one states - including many Republican-led states that opposed Obamacare before the election - have said they will allow the federal government to administer the program.

The rest have said they will form a state-federal partnership, according to the foundation.

Otter said he opted for a state-based exchange but did not believe the healthcare law would succeed in its goal of reducing costs.

Otter, an outspoken opponent of Obamacare, said he has chafed under the prospect of its "mandates and overreaching federal authority."

"Our options have come down to this: Do nothing and be at the federal government's mercy in how that exchange is designed and run, or take a seat at the table and play the cards we've been dealt," Otter said.

The health insurance exchange in Idaho, still subject to approval by the Republican-controlled legislature, must be open for enrollment by October 1, 2013.

(Editing by Daniel Trotta and Lisa Shumaker)